Deprivation index for small areas in Spain

The term deprivation is often used to refer to economic or social shortages in a given geographical area. This concept of deprivation has been identified for years using simple indicators such as income level, education and social class. One of the advantages of using simple indicators is the availability of data, since they come directly from sources of information like censuses and population registers. However, the main disadvantage of these indicators is their limited usefulness when measuring a concept as complex as deprivation with a single variable. One possible solution to this problem is using compound indices, made up of a combination of simple indicators. For years, the concept of material deprivation in Spain has been measured using indices or indicators imported from other countries. However, there are no studies that investigate if all of these variables are really related to material deprivation in Spain. In this context, the objective of this study is to create a synthetic index for material deprivation for the municipalities in Spain, bearing in mind the variables available from the Population and Housing Census. The index was built on a principal components factor analysis. The analysis showed two factors. The first factor showed a high positive correlation to the variables relating to illiteracy rate, unemployment rate and percentage of manual labourers, while the second factor was seen as highly positively correlated to the variables relating to the percentage of homes without access to a vehicle and the dependency index and also correlated, though negatively, to the percentage of foreigners between 16 and 49 who lived abroad in 1991. The variables that make up the first factor can be considered to be an approximation of the concept of deprivation in Spain. This study proposes a deprivation index made up of three simple indicators available from national information sources: percentage of illiteracy, percentage of unemployment and percentage of manual labourers. With this index, the criteria for measuring deprivation in Spanish municipalities can be unified and a comparison of the results of the different studies in our context facilitated.